8-K: Rithm Property Trust Changes Independent Auditor, Appointing Ernst & Young

Rithm Property Trust has dismissed Moss Adams LLP and appointed Ernst & Young LLP as its new independent registered public accounting firm.

Summary

• Rithm Property Trust Inc. announced the dismissal of Moss Adams LLP as its independent registered public accounting firm, effective March 7, 2025.
• The decision was approved by the Audit Committee and the Board of Directors.
• The audit report from Moss Adams for the fiscal years ended December 31, 2024 and 2023, did not contain any adverse opinions, disclaimers, qualifications, or modifications.
• There were no disagreements or reportable events between Rithm and Moss Adams regarding accounting principles, financial statement disclosure, or auditing scope.
• On March 10, 2025, the Audit Committee approved the engagement of Ernst & Young LLP (EY) as the new independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The engagement of EY is subject to completion of their standard client acceptance process and is effective immediately.
• Rithm did not consult with EY on accounting principles or the type of audit opinion during the relevant periods.

Sentiment

Score: 6

Explanation: Neutral sentiment as it is a routine change of auditors. The lack of disagreements with the previous auditor is a positive sign.

Positives

• Moss Adams' audit reports for 2023 and 2024 contained no adverse opinions or disclaimers, suggesting sound financial reporting during their tenure.
• The transition to Ernst & Young was made without any reported disagreements or reportable events, indicating a smooth changeover process.

Future Outlook

The company will be audited by Ernst & Young for the fiscal year ending December 31, 2025.

Industry Context

Changing auditors is a common practice among public companies, often driven by factors such as cost, expertise, or regulatory requirements. The selection of a Big Four firm like Ernst & Young could signal a desire for enhanced credibility and assurance.

Comparison to Industry Standards

• Many REITs (Real Estate Investment Trusts) use large, reputable accounting firms like Ernst & Young, PwC, Deloitte, and KPMG for their audits.
• A change in auditor is not uncommon, but the reasons behind the change are always scrutinized by investors.
• Comparable companies such as Annaly Capital Management or AGNC Investment Corp also utilize large, well-known accounting firms.

Stakeholder Impact

• Shareholders may view the change in auditors as a routine matter, but will likely monitor the transition for any potential impacts on financial reporting.
• Employees in the finance and accounting departments will work with the new audit team.
• The change should not directly impact customers, suppliers, or creditors.

Next Steps

• Ernst & Young will complete its standard client acceptance process.
• Ernst & Young will audit Rithm Property Trust's financial statements for the fiscal year ending December 31, 2025.

Key Dates